Proposing the balanced scorecard framework for ...

Middle East J. Management, Vol. 2, No. 1, 2015

Proposing the balanced scorecard framework for competency identification: an Iranian case study in software support industry Seyyed Babak Alavi* Graduate School of Management and Economics, Sharif University of Technology, Sohravard Sq., Habibollah St., P.O. Box 8639-11155, Azadist., Tehran, Iran Email: [email protected] *Corresponding author

Seyedeh Nasrin Bagheri Email: [email protected]

Masoomeh Khandan John F. Kennedy School of Government, Harvard University, 79 John F. Kennedy St., Cambridge, MA 02138, USA Email: [email protected] Abstract: Although some methods have been proposed so far for the development of competency models in the HRM literature, it has been argued that many of these methods are still subjective and lack systematic procedures. Based on balanced scorecard (BSC) as a strategy implementation framework, this paper proposes a method on how competency models can be developed. Using this method, a competency model is formed in relation to key business processes, organisational and information capitals in order to implement strategies. This approach links competency model development to strategy implementation process in a systematic way. The model was then implemented for software support personnel in a large Iranian company. The feasibility of its helpfulness was examined using a qualitative study by interviewing best performers in software support and a sample of informants of this company. This study provided a competency model and some ideas for further research expanding the model proposed in this paper for competency identification. In addition, this approach can also be used for training needs assessment in relation to strategic analysis. Keywords: competency identification; competency-based HRM; balanced scorecard; BSC; strategy implementation; competency model; Iran. Reference to this paper should be made as follows: Alavi, S.B., Bagheri, S.N. and Khandan, M. (2015) ‘Proposing the balanced scorecard framework for competency identification: an Iranian case study in software support industry’, Middle East J. Management, Vol. 2, No. 1, pp.53–78.

Copyright © 2015 Inderscience Enterprises Ltd.

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S.B. Alavi et al. Biographical notes: Seyyed Babak Alavi is an Associate Professor in the Graduate School of Management and Economics (GSME) at Sharif University of Technology, Iran. He has been selected as a Distinguished Lecturer of GSME for several years, and has published articles in English and Farsi in international and local journals. He also acts as an Organisational Development Consultant in some Iranian companies in change leadership and human resource management projects. His research interests are broadly related to: organisational behaviour and leadership and human resource development, and, more specifically, shared leadership, team effectiveness, and psychological aspects of career planning and change leadership. Seyedeh Nasrin Bagheri, prior to starting her career as Supervisor of the Budgeting Department in a pharmaceutical company was a Business Analyst in a software company, specialised in developing, implementing and supporting financial software, where she monitored and analysed the performance of different business units in software support. She received her BS in Industrial Engineering from Iran University of Science and Technology and her MBA from Sharif University of Technology. Masoomeh Khandan received her BS in Electrical Engineering from Sharif University of Technology, and now she is a Master candidate in Public Administration/International Development at Harvard Kennedy School of Government. She is the co-author of some papers in the areas of anticipating complex behaviours of coercive actions in international relations and teaching systems thinking.

1

Introduction

Competency-based human resource management (HRM) has been widely emphasised in recent years as a new approach in modern organisations (Rothwell and Lindholm, 1999; Stevens, 2012). This approach considers employees’ competencies as the basis of the development of various HRM functions such as selection, and training and development (Dubois and Rothwell, 2004). This is based on the core concept ‘competency’. Although there may not be a consensus among researchers and professionals on the definition of ‘competency’, in this article, it refers to potentially demonstrable behaviours that are critical for achieving high performance. In addition, competencies are based on knowledge, skills, and abilities. Competency models as frameworks of competencies for several roles or job families such as project managers and HR managers have been developed and used for different training and developmental purposes (Rodriguez et al., 2002). Training and development programmes that are based on competency models can help organisations develop their core competencies and support their strategies (Dubois and Rothwell, 2004). From this perspective, competency-based HRM has been proposed as a fundamental approach for supporting organisational strategies, and as a new paradigm for designing modern organisations in competitive environment (Lawler, 1994). Because the competency model component is the core of competency-based HRM approach, development of theoretical and methodological frameworks for the development of a competency model is essential. Although several methods have been proposed so far, some researchers have argued that most methods are very subjective and

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leave users with their intuition for identifying competencies in relation to strategies (Mirabile, 1997; Sanchez and Levine, 2009; Stevens, 2012). In addition, several ambiguities exist in the area of methodological aspects of competency identification including the lack of an approach that can distinguish competency identification from job analysis (Stevens, 2012). Rothwell and Lindholm (1999) have reviewed several approaches for competency identification with emphasis on past-oriented approaches that are based on the analysis of job processes and requirements. However, when future-oriented approaches are suggested, a methodological gap can be identified. Although it has been suggested that future-oriented competency models must be driven from strategies and success factors of a job, few systematic models have been proposed on the elaboration of the development process (Rothwell and Lindholm, 1999).In addition, Stevens (2012) argued that although methods of competency identification and job analysis must be differentiated, but more systematic methods are necessary to elaborate the distinct nature of competency identification from job analysis. This is an important issue, because competency modelling has been considered as a vehicle for identifying HRM practices for generating strategic and core competencies required for the success of organisations (Stevens, 2012). Therefore, the development of a method that can support the alignment between strategic practices and HRM requirements is highly necessary. In addition, it seems important and helpful to develop some approaches that integrate strategy formulation and implementation with HRM practices (Armstrong, 2006). In this paper, the balanced scorecard (BSC) approach widely applied for strategy implementation (Kaplan and Norton, 2001a) has been used as the theoretical basis of identifying competency models. BSC was initially proposed as a performance management technique by Kaplan and Norton, but has been gradually developed as a strategy implementation approach (Kaplan and Norton, 1993, 1996, 2000a, 2004, 2006, 2008). Different components of BSC will be reviewed in the literature review section, but the growth and learning dimension of this model is the main focus of this study that considers competency profiles for strategic job families. Strategic job families refer to groups of jobs that have the greatest impacts on key business processes among all kinds of jobs in an organisation (Kaplan and Norton, 2004). The framework provided in this paper proposes that competencies for strategic job families can be identified by: 1

analysing key business processes and process activities (that generate customer values)

2

essential organisational capital (including organisational culture and leadership)

3

information systems required for the implementation of relevant strategies.

Another benefit of using this model for competency identification, in addition to the future-oriented nature of it, is that this model links competency identification to performance indicators provided by the BSC model. The lack of systematic linkage between competencies identified by some methods with performance indicators has been suggested as an important weakness of current competency identification modelling (Langdon and Marrelli, 2002). Given that the BSC model provides an organisation with performance indicators from four aspects (learning and growth, key processes, customers, and financial results), it can be a helpful platform for identifying competencies that

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predict employees’ performance in relation to organisational performance from strategic viewpoints. In the next sections, first, in the literature review, the literature of competency-based HRM and the BSC framework are briefly reviewed. Then, a theoretical framework integrating the two areas is presented proposing a model of how competencies can be identified in relation to different components of the BSC framework. A case study, as an implementation context of the model proposed in the paper in a software organisation, is then reported. Finally, the paper is summarised by providing theoretical and practical guidelines for future research and practice.

2

Literature review

2.1 Competency-based HRM Competency-based HRM has been widely proposed and discussed in recent literature (Dubois and Rothwell, 2004). According to this approach, different types of HRM functions are formed in relation to competency models (McLagan, 1980; Boyatzis, 1982; Dubois and Rothwell, 2004). A competency model can be defined as a systematic categorisation of narrative descriptions of different competencies essential for an identifiable job family (e.g., project managers or HR managers) (Rothwell and Lindholm, 1999). Armstrong (2006) proposed that competencies may be categorised into behavioural and technical types. Behavioural competencies refer to those that describe behavioural expectations such as teamwork, communication and decision making. These are also called ‘soft skills’. On the other hand, technical competencies refer to those that are required for performing technical components of the job. Technical competencies may be applied for a group of jobs or be considered as role specific competencies. Different methods have been proposed for the identification of competencies. Rothwell and Lindholm (1999) reported an evolution in the US competency literature from using the exemplary approach and fully-successful performers to strategic-related approaches that suggest linking competencies to strategies in order to enable organisations for implementation of their strategies. Although several identification models have been proposed in the literature, the model proposed by Spencer and Spencer (2008) may be considered as the most research-oriented and systematic framework in the past literature (Rothwell and Lindholm, 1999). According to their model, first, those jobs that have great impacts on an organisation are identified. Second, characteristics of exemplary employees are identified using different data collection methods in relation to the job tasks, and finally, after categorisation of those characteristics, the final model is validated. Stevens (2012) similarly reviewed the literature of competency-based HRM, and concluded that this area needs further conceptual and methodological analysis in order to differentiate it from the traditional job analysis, considering the similarities of these practices. In addition, they emphasised that recent approaches emphasise the role of strategy in competency identification despite the methodological ambiguities of this area. Some researchers have argued that although competency modelling and job analysis are conceptually distinct, but in practice, competency modelling cannot be distinguished from job analysis. This is because current competency modelling approaches lack

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methodological rigor that can systematically link competency modelling to organisational strategies (Sanchez and Levine, 2009; Schippmann et al., 2000; Stevens, 2012). Since Prahalad and Hamel’s (1990) work on defining the construct ‘core competency’ as a characteristic that impact organisational competitiveness, competency models have gained strategic importance and are related to organisational capabilities as a product of collective learning (Ulrich, 1997). From this perspective, integration of individual level competencies can develop organisational capabilities. Rothwell and Lindholm (1999), broadly categorised competency identification methods into three types, namely: borrowed, borrowed and tailored, and tailored approaches. In brief, borrowed approach refers to borrowing a competency model from an organisation. When using the borrowed and tailored approach, a model is also borrowed but is customised with the contextual factors based on some limited data collection and analysis. However, when using the tailored approach, a rigorous research methodology is used for the development of a competency model (e.g., using focus groups and interviewing). Rothwell and Lindholm (1999) proposed some tailored-based approaches namely: process-based (identifying competencies based on work processes), output driven (competencies required for performing successfully), trend driven (focusing on competencies required for adapting environmental changes), and work responsibilities driven (identifying competencies necessary for performing responsibilities and playing organisational roles). It can be argued that future research must focus on future-oriented approaches emphasising strategies rather than past-oriented approaches (Rothwell and Lindholm, 1999). Yang et al. (2006) proposed a model called ‘process-oriented core competency identifying (POCCI)’ that emphasises key processes that create values for customers. POCCI suggests that core competencies can be identified by assessing employees’ competencies in each value activity as operations that create values. A combination of these operations is called ‘value activity chain’. Yang et al. (2006) proposed a model linking strategies to processes in order to identify core competencies. This model provides very helpful insights into identifying core competencies in relation to business processes from a strategic view point, by assessing the impacts of environmental opportunities and threats. However, it lacks sufficient explanation of how to systematically identify competencies in relation to strategies and consider competency models as an enabler of strategy implementation. After the development of a competency model, other HRM functions can be developed (Armstrong, 2006; Dubois and Rothwell, 2004; Rodriguez et al., 2002). Dubois and Rothwell (2004) provided guidelines of how to develop HRM functions in relations to competency models. For example, recruitment and selection can be designed based on a competency model. In addition, competency-based training and development programmes, in relation to the elements of competency models, can be designed targeting the development of demonstrable behaviours essential for successfully performing tasks. Some other complex HRM functions such as succession planning and career management can also be developed based on competency models (Rothwell, 2005; Weyuker et al., 2000). It has been proposed that succession systems can be developed by identifying potential successors based on competencies required for filling strategic positions. In addition, training and development of competencies are necessary for the development of a talent pool. Career planning based on competencies has also been proposed in the literature. For example, AT&T developed a career management system for software

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testers based on a path of competency development throughout of their career in order to enhance the professional identity of this career (Weyuker et al., 2000). In summary, given the importance of the development of competency models for the implementation of HRM functions in relation to strategies, and lack of systematic models of competency identification aligned with strategies, it is necessary to develop future-oriented models for competency identification.

2.2 Balanced scorecard Kaplan and Norton (1993) initially proposed the BSC framework as a model to help managers see their organisations’ performance indicators from different perspectives and realise whether improvement in one area may be in expense of other areas. They gradually improved the framework as a tool for strategy implementation. The framework as a model of performance measures contains four aspects of performance measures namely: financial perspective, customer perspective, process perspective, and learning and growth perspective (Kaplan and Norton, 1993). Financial perspective contains measures of financial performance such as revenue and cash flow. Customer perspective includes measures of performance from the perspective of customers such as measures of customer satisfaction. Some measures must also be developed for assessing internal business processes such as the effectiveness of product development cycle and customer relationship management (CRM). Processes are important to analyse in the framework, as it is expected that the customer-related measures are the outcomes of process-related measures. In other words, processes must be inspected because they produce values for customers. Kaplan and Norton (2001b) proposed that key business processes may be categorised into four categories namely, innovation processes, customer management processes, operational processes, and regulatory and environmental processes. Kaplan and Norton proposed that although four types of processes are important, but a company must excel at the one that has the greater impact on its customer value proposition. They also argued that different types of processes may also be identified based on the nature of industry and the organisation. The fourth perspective of the framework, learning and growth, is fundamental to enable processes. It contains three broad categories of measures namely: human capital, organisational capital, and information capital. Human capital refers to an organisation’s possession of sufficient number of human resources with right competencies for supporting key business processes. Organisational capital includes appropriate organisational culture, leadership, and structure essential for supporting key business processes for the creation of values for customers. Information capital contains the IT portfolio of infrastructure and applications that support key business processes (Kaplan and Norton, 2004). As a strategy implementation tool, BSC suggests that an organisation’s strategy must be translated into four areas by specifying objectives, measures, targets, and initiatives in each aspect (Kaplan and Norton, 2000a). Kaplan and Norton (2000a) also proposed the concept strategy map. A strategy map is a theory of causal links of objectives and measures of a perspective to other perspectives specifying improvements and converting assets to create desired outcomes. They proposed that strategy maps are also useful for effectively communicating strategy implementations plan to employees. For example, a strategy map may indicate how recruiting new employees for specific positions and enhancing their capabilities will impact the effectiveness of key business processes that in turn, will increase the retention

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of customers, and thus, will increase a company’s revenues. From this perspective, they suggested that a strategy map can be used to align HRM, information technology, and organisational structure and culture with organisation strategies. Enhancing employees’ competencies has been considered as a typical enabler of improvement of business processes. Kaplan and Norton (2004) proposed that intangible assets included in the learning and growth perspective must be integrated in order to use in strategy implementation. For example, effective use of IT systems may require appropriate training for employees. From this perspective, they proposed the term ‘strategic readiness’ to assess the extent to which intangible assets are integrated properly and aligned with organisation strategies. They proposed how one can conceptualise the strategic readiness idea for every type of capitals. Kaplan and Norton specifically proposed that human capital readiness can be assessed by the gap exists between the current and desirable number of competencies held by incumbents of strategic job families. They called the task of identifying required knowledge and skills as ‘job profiling’ or ‘competency profiling’ (Kaplan and Norton, 2004). Marr and Adams (2004) argued that Kaplan and Norton (1996) used the term human capital as a component of the learning and growth perspective in their early work in relation to skills, knowledge, and talent, but in their recent works, they have used the term intangible assets without sufficient analysis of previous literature of similar constructs. Although the BSC model has been widely used in thousands of companies, Kaplan (2010) has recently elaborated the conceptual foundations of this model. In this article, Kaplan considered the BSC model as an advancement of the classic management models such as management by objectives (Drucker, 1954) for the alignment of everyday activities to strategic objectives. In addition, the BSC model was an answer to extend managers’ views from a short-term goal setting to a wider and long-term planning in relation to strategic objectives. This was claimed to be a major obstacle of American businesses compared with Japanese companies’ approaches toward long-term goals and objectives (Kaplan, 2010). Moreover, he introduced the BSC model as a tool that is conceptually a vehicle to translate strategies into practice by providing series of cause and effect course of actions that are required for attaining outcomes (Anthony, 1965). From his perspective, it was required to develop a framework for incorporating the intangible assets component into planning processes of strategic performance of an organisation. In addition to the above perspectives, Kaplan (2010) discussed the conceptual foundations of the BSC model in relation to three theoretical perspectives of: 1

shareholder value and the principal-agent framework

2

uncertainty and multi-period optimisation

3

stakeholder theory.

In relation to the first perspective, they challenged compensating executives only by a single measure of financial performance. Secondly, he challenged the principal-agent framework in terms of its emphasis on outcome measures and the lack of sufficient attention to other performance measures during management processes. That is, performance management is not only about the outcome, but it is about the dynamic nature of management that requires management control systems for paying attention to

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measures that must be dynamically controlled during processes. In terms of stakeholder theory, he argued that having the agenda of all kinds of stakeholders may not be feasible at the same time, and even, may not be necessary. He emphasised that although the BSC model considers different types of stakeholders, but from a strategic view point, this model considers stakeholders only when initiatives are aligned with ‘value creation’ for customers. Therefore, main stakeholders such as human resources and social communities are considered in the BSC model, but in a way that initiatives in relation to these aspects can create ‘values’ for customers in relation to strategies. Therefore, these stakeholders are not the main goal of the model per se. This is why he emphasised that “…we were not taking a pure stakeholder approach” [Kaplan, (2010), p.16]. Despite the popularity of the BSC model, some conceptual and practical limitations have been suggested by some researchers (e.g., Yadav, 2012). First, Yadav argued that the BSC model is a top-down approach that neglects double-loop learning, given that it considers strategies as inputs of this modelling. However, Kaplan and Norton consider this type of learning as a part of review process while implementation (Yadav, 2012). Second, it has been suggested by practitioners that the implication of the BSC model is practically difficult in some organisations with weak performance-based culture, and it takes too much time for implementation which may direct it to a complete failure. It has been argued that the BSC model fails to consider all key stakeholders such as suppliers, competitors, regulators, and community, and the neglects the relative bargaining power of different stakeholders that influence the BSC model (Brignall and Modell, 2000). However, Kaplan (2010) argued that these are indirectly included in other aspects of the model, because the main objective of a company is to create values for its customers, and therefore, initiatives and targets for other types of stakeholders must be strategically aligned with this aspect. In relation to this article, Rousseau and Rousseau (2000) argued that the model proposed by Kaplan and Norton lacks an elaborated role of HRM practices in relation to other components of the model. In addition, Marr and Adams (2004) argued that the concepts of human capital and intangible asset described by Kaplan and Norton are not well defined in their recent works, although the human capital component in the initial version of their model mainly focused on skills, talent, and knowledge (Kaplan and Norton, 1996, 2004). In summary, it seems that both literature areas of competency identification and the BSC model may contribute to each other. The BSC approach in strategy implementation can be helpful for HRM practitioners in linking competency models to strategies and strategic performance indicators, and may give insights for the development of rigorous methods for competency identification models. In addition, using the literature of competency identification in the context of the BSC model may be helpful for the implication of this approach in HRM by extending the human capital component and elaborating the human part of this model.

3

Theoretical framework

This paper proposes that competency identification can be incorporated into the framework of the BSC model. Human capital based on Kaplan and Norton (2004) refers to staff’s knowledge, skills, and talent, which are related to competencies defined in this article. Based on this framework, human capital as a component of the learning and growth aspect can be the outcome of practicing competency models of strategic job

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families within the context of HRM practices. Figure 1 demonstrates how a competency model can be developed based on understanding key business processes, and competencies required for performing these key processes. As reviewed earlier, key generic business processes may be categorised into operational, customer relationship, innovation, and regulatory and social process management although there may be some other processes in a company that may be added to the model. Therefore, a competency model for those key job families that are involved in these processes may contain four areas in relation to these four types. For example, quality management for operational, empathy for customer relationship, creativity and diverse thinking for innovation, and morale reasoning for regulatory and social processes may be considered as units of a sample competency model. Some of these competencies that are work-related may be similar to what Armstrong (2006) proposes as technical competencies. Competency models for strategic job families within the BSC framework

Learning and growth

Internal business processes

Customer

Finance

Figure 1

In addition, some competencies are required for creating appropriate organisational capital and information capital. This is depicted in Figure 1 by the two arrows from the human capital component to the other two capital components. That is, some competencies may be required to develop and foster organisational and information capital essential for practicing key processes. This idea is consistent with the notion that “they [intangible assets] must be bundled with other intangible and tangible assets to create value” [Kaplan, (2010), p.9]. Aspects of organisational capital such as the development of supportive organisational culture, shared leadership behaviours, and policies can be formed if some competencies are hold by the incumbents of strategic job families such as middle and high level managers. Examples of these competencies are

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participative leadership, delegation, and teamwork. These competencies are essential for the creation or improvement of some group and/or organisational level phenomena within the organisational capital component. These behavioural expectations may be examples of behavioural competencies proposed by Armstrong (2006). Given that middle and top organisational level managers may have more influence on creating organisational capital by practicing mechanisms such as policy making and leadership, it is expected that competencies identified from this part is more relevant for competency models of managers. In addition, in order to effectively utilise information capital necessary for supporting key business processes, some other competencies may be required. For example, competencies related to the applications of networks, e-mail communication, ERP software applications may be required for creating information capital essential for the implementation of a specific strategy. Consistently, Bassellier et al. (2001) proposed that business managers need information technology competencies required for performing their tasks as well as promoting their organisational capabilities for competition. This approach may also be helpful for competency identification, considering the conceptualisation of competency in relation to performance. As defined earlier, a competency is critical for high performance, and therefore, competency identification regarding strategies requires linking a competency model to performance indicators derived from strategies. Using the BSC approach in competency identification provides opportunities for linking competency models to performance indicators located in the areas of key business processes, organisational capital, and information capital.

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Case study

In order to implement the model proposed above, a case study was designed. The case study strategy (Yin, 2003) was used because it was intended to identify a company with a specific strategy that needs to be implemented, and managers with interests in identifying key competencies of the strategic job families of their organisation. This strategy enabled us to have an opportunity for collecting and analysing data to examine if the theoretical framework of the study is applicable for competency identification. Using an exploratory approach, a qualitative research was conducted for the development of a competency model for software support personnel as a strategic job family of an Iranian software company described below. A qualitative approach was utilised in order to better understanding of the application of the theoretical framework in the context of the study (Patton, 1990). In this company, support personnel were responsible for solving customers’ problems and answering technical questions when using software applications developed by the company during deployment and usage.

4.1 Company background The context of this study was the largest private software company in Iran, a holding company consisting of 27 nationwide subsidiary companies providing after-sales services and 24 licensed companies providing sales and deployment of business software applications across the country. This holding company consisted of more than 900 employees, specialised in various fields of technical expertise, which provide services to more than 5000 organisations and institutions as their customers. The company mainly

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focuses on providing IT solutions for its customers including implementation and technical support of software systems, advanced network engineering services and data security. This software company is ranked the first by the High Council of Informatics of Iran among Iranian software companies.

4.2 Research design Data collection was conducted by using semi-structured interviews and systematically reviewing formal documents related to software support processes in 2010. Due to the qualitative nature of the research, a purposeful sampling was used (Patton, 1990). Each interview was conducted in approximately one hour, and all were taped for further analysis except few that were not permitted by the interviewees. The interviewing process continued until the saturation of information was achieved. This refers to the state in which interviews with new individuals only obtained previous collected data (Seidman, 2006).

4.3 Sample The data collection process of this study required in-depth interviews to acquire the interviewee’s experiences in details and depth. That is why a purposeful sampling method was employed (Seidman, 2006). The interviewees selected through this sampling process were a combination of individuals in different roles and disciplines (considering organisational structure in Figure 2) in relation to support processes of the company (Table 1). Sales and customer service experts and managers were included because of their responsibilities for policy-making, setting standards, and controlling the support process in subsidiary companies. This makes them the best source on company standards and policies related to the support process. Subsidiary companies’ top managers, due to their roles as the highest executive managers of their companies were knowledgeable on the required competencies for support personnel. Another group of individuals included in the interviewees was the ‘line managers’ in subsidiary companies who supervise the product sales and support services in their own service lines (such as oil companies) and thus, were the most informed individuals about customers and their needs in their respective service lines. Support supervisors were also included in the interviews because of being in charge of the whole support team (i.e., task allocation within their support team, and responding to their customers). Besides, support supervisors were usually among the most experienced support experts in their departments. These factors make them uniquely informed of customers’ needs, support and its related processes. A sample of customers was also a part of the interviewees because they receive direct services from support teams. Since the final goal of the subsidiary companies was to create and maintain customer satisfaction, customers were a proper source for the identification of competencies required for support personnel. It should be noted that since the holding company was not comfortable with individuals outside the company contacting its customers, we had permission to interview with a limited number of customers. Finally, some ‘best performers’ among support personnel introduced by their managers and identified from the performance appraisal system were included in the interviews to comment on the required competencies for their own tasks. Using best performer for interviewing has been proposed as a key method in previous studies (Rothwell and

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Lindholm, 1999). Important selection criteria were that the interviewed support personnel had at least one year of experience as a support personnel, and should have demonstrated a highly successful performance resulting in a low number of unsatisfied customers, and possessed a vast knowledge of software systems produced by the company. Moreover, the interviewees covered all the different fields in which the company offers its products and services. Figure 2

Organisational structure of a sample subsidiary company

Table 1

Sample composition

Interviewees

Sample size

Population size

Sales and customer service personnel department

2

2

Subsidiary companies’ managers

2

4

subsidiary companies’ line managers

3

6

Support supervisors

4

8

Support personnel (best performers)

4

45

Costumers

12

4.4 Interview questions The interviews consisted of a set of questions in relation to the main strategy implemented in support services and according to the theoretical framework (Figure 1). The strategy implemented in the company was ‘to increase the customers’ satisfaction by introducing and employing online services as one of the recent technology in support services’. From this perspective, several changes have been made in organisational processes, and some new technologies have been implemented to support the strategy. Therefore, considering the theoretical framework, some questions were designed in order to identify three main fields of information:

Proposing the balanced scorecard framework for competency identification 1

the key strategic sub-processes related to the support personnel’s job which contribute to the company objectives, and accordingly, the main competencies of a support personnel required for performing these sub-processes

2

information systems

3

organisational capital required for the accommodation the support processes.

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These three aspects introduced in the theoretical framework (Figure 1) can be highly influenced by competencies possessed by the incumbent of strategic job families. For example, some questions such as ‘What would be the main aspects of online support processes?’ and ‘What competencies are necessary for performing online service processes with the highest standards?’ were used for understanding the link between competencies and key processes. Each sub-process of the online service process indicated in Figure 3, that will be described later, were explored for identification of required competencies. Some other questions such as ‘What competencies are required to use the technology implemented for online services?’ were used to identify key competencies for supporting the strategy in terms of information capital. More specifically, this company started using a software package that enabled support personnel to provide online services to customers. Some specific questions were asked to identify required competencies for using this technology. In addition, some specific questions were also developed for interviewing customers for understanding their expected values as the outcome of the key sub-processes influenced by support staff’s competencies. For example, customers were asked about their main reasons for contacting service employees, and what competencies were required to resolve their problems using the online service. It was expected to face some difficulties when using online technology compared with services provided by phone or the traditional face to face services in customer sites.

4.5 Data analysis techniques By analysing company documents and coding interviews, several themes were identified including: key support processes and activities, customers’ expectations from the support process, and information and organisation capital. Referring to the theoretical framework (Figure 1), the next step was to identify the key competencies. Accordingly, the required competencies for realising these four perspectives were identified by coding transcripts. In order to analyse the collected data and develop a competency model, the transcripts of interviews and documents were investigated using the thematic analysis technique (Braun and Clarke, 2006). Every phrase or sentence referring to the research goals was extracted and coded (Hesse and Sharlene, 2004). This was conducted after each interview. These codes were related to different components of the theoretical framework essential for identifying key competencies for supporting support processes, and generating related organisation and information capital. Then, the initial codes were classified into categories, and finally, each was titled by a main theme. Some of the main categories had their own sub-categories, named sub-theme. Identifying these sub-categories continued until all the identified concepts were addressed (Braun and Clarke, 2006). These codes and categorisations were the foundations of the development of a competency model for the support role considering the online support strategy.1

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4.6 Validation In the validation stage, the competencies and their behavioural elements were checked to determine the significance of each competency in the successful performance of support personnel. Various methodologies can be used for examining the validation of results. Predictive validity test that quantitatively assesses the extent to which a competency predicts the future performance of support personnel was not feasible given the time consuming nature of this methodology. This was considered as a practical limitation of this study. Consequently, a focus group consists of six knowledgeable support experts and top managers introduced by the company, was formed to investigate the significance of each competency in the competency model. At the end, the competency model was completed by taking two factors into account: the frequency of each competency pointed out in the interviews, and the importance score of each competency assessed in the validation meeting. Competencies with a frequency or validation scores less than 2 were eliminated from the list of competencies after making a consensus with the members of the validation meeting.

5

Results

As mentioned earlier, key competencies for support personnel were extracted based on the current strategy of the organisation ‘to increase the customers’ satisfaction by introducing and employing online services as one of the recent technology in support services’. This strategy focused on reducing the response time of services by providing costumers’ required services through the internet instead of face to face services in the locations of customers. Considering the BSC framework, this strategy concentrates on the improvement of the online service processes as a part of operation processes. Hence, to employ this strategy, the new IT technology had been purchased, and the required process and procedures had been developed. Along with these changes, the key competencies needed for the implementation of the strategy were studied from three perspectives: internal processes, informational capital, and organisational capital. In addition, the perspective of customers about their expected values and required competencies of support personnel provided some other insights into the final result that will be elaborated later. It must be emphasised that final competency model proposed in this article contains competency items which have been saturated (Seidman, 2006) during qualitative data analysis. The following sub-sections contain the results and discussions in relation to each four perspectives mentioned above and discussed in the theoretical framework.

5.1 Analysing the key internal business processes perspective of the BSC framework According to our theoretical framework (Figure 1), first, key competencies were analysed by reviewing key processes, which are associated with the support process in this

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research. This process, shown in the Figure 3, in subsidiary companies starts with a customer’s contact seeking support online services. Then, a support staff is allocated for answering the customer’s issue, and finally the process ends when the issue is solved. During the process, it is expected that the support staff identifies problems and acquire necessary information by actively listening to customers’ requests. This process takes place through either over-the-phone, instant (online), or in-person communication, in this order. The fourth stage of the support process contains the support personnel pursuing the problem in the production sector, in case some modifications or supports may be necessary by the software development department. Figure 3

Support process of the company

The competencies regarding the support process in either of the above mentioned stages were classified into eight competency clusters reported in Table 2, namely: planning and time management, self-control, domain knowledge and expertise, social relations, honesty and truthfulness, effective communication, flexibility, passion and perseverance. Some competencies identified above can be discussed from the perspectives of some organisational behaviour theories. According to the results, customers’ trust to support personnel can be considered as a key factor for support processes. Trust can be defined as “the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party” (Kee and Knox, 1970).2 Consistently, Mayer et al. (1995) offered a model for Trust. Trustworthiness of a trustee depends on perceptions of three characteristics: ability, benevolence, and integrity. Ability is a set of skills and abilities for achieving the goal (related to the 1.3 competency cluster-domain knowledge and expertise). Benevolence is the extent to which a trustee is perceived as someone who intends to do good to the trustor. Benevolence is aligned with some behavioural elements identified above (1.5.1 and 1.5.3 in Table 2). Integrity is the trustor’s perception about the trustee adherence to a set of principles that the trustor finds acceptable. The behavioural element 1.5.2 considers integrity. To summarise, the key competencies named ‘knowledge and expertise’ and ‘honestly and truthfulness’ may impact the extent of trustworthiness of a support personnel from the perspective of customers.

68 Table 2

S.B. Alavi et al. Identified themes related to key competencies regarding the key internal business processes perspective Unit of competence-internal processes

1.1

1.2

Competency cluster-planning and time management 1.1.1

Collects information for minimising the response time to customers (phone)

1.1.2

Prioritises services among assigned tasks (phone)

1.1.3

Plans to avoid deviation from the time schedules (phone)

Competency cluster-self-control 1.2.1

1.3

1.4

1.5

1.6

1.7

1.8

Possesses self-control and work under stressful conditions (phone) (online)

1.2.2

Demonstrates patience and maintains calm answering customers (phone)

1.2.3

Shows empathy with customers (phone)

Competency cluster-domain knowledge and expertise 1.3.1

Possesses technical knowledge in software systems (phone) (online) (in person)

1.3.2

Knows how to operate service tools (online)

Competency cluster-social relations 1.4.1

Forms friendly relations with customers (phone) (in person)

1.4.2

Dresses up properly and suitable for the situation (in person)

1.4.3

Treats people with proper respect (in person)

Competency cluster-honesty and truthfulness 1.5.1

Shows responsibility and follows up until the issue is solved (pursue)

1.5.2

Behaves according to professional and ethical values and principles (pursue)

1.5.3

Demonstrates benevolence and gains customers’ trust (pursue)

Competency cluster-effective communication 1.6.1

Pursues customers using negotiation skills (pursue)

1.6.2

Possesses influence on other departments for solving customers’ issues (pursue)

Competency cluster-flexibility 1.7.1

Cooperates with various people possessing different characteristics (pursue)

1.7.2

Provides services employing various tools and methods (pursue)

Competency cluster-passion and perseverance 1.8.1

Possesses internal motives for performing support activities (pursue)

Note: These competencies play important roles in any of the four stages of support process; (phone) over the phone service, (online) online service, (in-person) inperson communication, (pursue) support personnel pursuing the problem.

Emotional intelligence is also another concept that may be related to some competencies reported above. According to Salovey and Mayer (1989, p.5), emotional intelligence is “the ability to perceive emotions, to access and generate emotions so as to assist thought, to understand emotions and emotional knowledge, and to reflectively regulate emotions so as to promote emotional and intellectual growth”. Suggested by Goleman (1995), five dimensions of emotional Intelligence are self-awareness, self-management, selfmotivation, empathy, and social skills. From this perspective, flexibility and selfconfidence (1.2.1 and 1.2.2) and self-control and empathy (1.2.3, 1.4.1, 1.4.2, 1.4.3, and

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1.6.1), and team work and cooperation (related to social skills) may be considered as components of support personnel’s emotional intelligence. Support personnel’s key competencies may also impact customers’ perceived service quality. According to Lewis and Mitchell (1990), service quality is the extent to which a service meets or exceeds customer needs and expectations (Shahin, 2006). During the past two decade, service quality has become a major area of attention because of its strong impact on business performance. Service quality, proposed by Van Iwaarden et al. (2003), has five dimensions as follows: 1

tangibility: physical facilities, equipment and appearance of personal

2

reliability: ability to perform the promised service dependably and accurately

3

responsiveness: willingness to help customers and provide prompt service

4

assurance: knowledge and courtesy of employees and their ability to inspire trust and confidence

5

empathy: caring and individualised attention that the firm provides to its customers.

Tangibility is a factor that has been reflected in the behavioural element (1.4.2) because of its focus on the support personnel appearance and the tone of communication. Furthermore, behavioural elements (1.5.1 from ‘honesty and truthfulness’ and 1.4.3 from ‘social relations’) may be related to responsiveness. Competency cluster ‘knowledge and expertise’ in addition to two behavioural elements (1.5.1 and 1.5.3) may be related to the assurance component. Lastly, some other behavioural elements in relation to empathy (1.2.3) may also be related to perceived service quality. From this perspective, it can be suggested that some competencies identified here are consistent with characteristics that can impact customers’ perceived quality as an important value expected from support processes.

5.2 Key competencies regarding customers’ expected value (internal processes outcome) According to the theoretical framework, customer expected value is the outcome of the internal business processes. In this section, competencies required for achieving satisfying results of the internal processes from the customers’ perspective are presented. The interviewees were selected from 12 customers (12 companies) approved by the company (see Table 1). The problems for which customers contact support personnel can be classified into software technical problems and users’ applications issues. Six competency clusters were identified regarding customer’s expected value (see Table 3), namely: Self-confidence, expert knowledgeable (e.g., knowledge of accounting for support personnel providing support for accounting software), listen accurately, perceive concepts clearly, and provide proper response, problem solving skills, team work and cooperation, and passion and perseverance in teaching software systems to customers.

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Table 3

Identified themes related to key competencies regarding customers’ expected value in the customer perspective Unit of competence-customers’ expected value

2.1

Competency cluster-self-confidence 2.1.1

2.2

2.3

2.4

Competency cluster-expert knowledge 2.2.1

possesses academic knowledge in a related field of expertise

2.2.2

Knows the common procedures in the industry in hand

2.2.3

Demonstrates a good grasp on related systems and their relations

2.2.4

Holds knowledge about related databases

Competency cluster-listening, perception, and providing proper response 2.3.1

Shows listening skills and understands stated issues well

2.3.2

Approaches an issue from different angles

2.3.3

Expresses concepts clearly

Competency cluster-problem solving 2.4.1

2.5

2.6

Possesses sufficient self-confidence and shows proper assertiveness when expressing ideas

Employs knowledge and expertise for problem solving

2.4.2

Demonstrate creativity

2.4.3

Analyses problems and chooses a proper solution

Competency cluster-team work and cooperation 2.5.1

Seeks assistance from knowledgeable and informant people, if necessary

2.5.2

Cooperates with others and contributes to team work

Competency cluster-passion and perseverance 2.6.1

Shows excitement and interest in teaching software systems

5.3 Key competencies regarding organisational capital in the learning and growth perspective of the BSC framework Organisational capital represents those assets such as team work atmosphere, passion for learning, organisational commitment, and perseverance for solving customers’ problems as a part of organisational culture, which support the implementation of the key processes for achieving the goals and strategies of the organisation. From this perspective, four clusters of key competencies required to achieve organisational capital were identified, namely: knowledge sharing and learning, passion and perseverance to achieve organisational goals, organisational awareness, and team work and cooperation (see Table 4).

5.4 Key competencies regarding Information capital in the learning and growth perspective of the BSC framework In order to manage the support process of the company, support personnel need to employ a set of information systems and software tools, including online service, the customer’s portal, the management of distribution and controlling customer request software, NTR software, remote connection software, and web report. The key

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competencies regarding informational systems and tools were identified from the organisational processes documents and training programmes topics. The results of this part mainly consisted of competencies related to domain knowledge and expertise, presented earlier, and technical competencies related to the applications of software programmes named above. Table 4

Identified themes related to key competencies regarding organisational capital in the learning and growth perspective Unit of competence-organisational capital

3.1

Competency cluster-knowledge sharing and learning 3.1.1

Shows excitement for learning

3.1.2

Gains the knowledge required to perform as fast as possible

3.1.3

Demonstrates ability and willingness to share the knowledge to others

3.1.4

Facilitates own development by delegation and helping others’ development

3.2

Competency cluster-passion and perseverance to achieve organisational goals

3.3

Competency cluster-organisational awareness

3.2.1

3.4

Shows effort and perseverance for achieving goals.

3.3.1

Stays loyal to the organisation and perceives organisational objectives aligned with his/hers

3.3.2

knows about the organisation and its missions and objectives

Competency cluster-team work and cooperation 3.4.1

Seeks assistance from knowledgeable and informant people, if necessary

3.4.2

Cooperates with others and contributes to teamwork

5.5 Key competencies regarding a new strategic insight According to the initial theoretical framework of this research, a competency model must be future-oriented and possess personnel’s required competencies to reach the organisation’s vision and strategy. Although this research targeted the online service strategy, it was identified during interviewing that the organisation started developing a new strategy while implementing the online support strategy. However, the implementation plan of this strategic insight was not clear enough for the top managers. Top managers had some general ideas about the key competencies that support staff must have in future regarding this strategic insight although their ideas were not elaborated. According to the results, the identified future strategy was “to provide the industryspecific services to each customer”. That is, each subsidiary company must be dedicated to specific industries by establishing industrial service lines within the formal structure of each subsidiary. In other words, the new strategic insight emphasised grouping customers based on their industries and providing them with customised services consistent with the nature of their industries. In addition to this strategy, a consensus existed between top managers to create a higher value for customers via providing them with service through a unique contact point. This may be consistent with what has been suggested by Kotler and Keller (2006). According to them, an organisation can improve its values in some ways. One way is to reduce the customer’s non-monetary costs by reducing the time, energy, and psychological costs. The new strategic insight may improve service quality

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while facilitates easing the customer’s non-monetary costs. To implement this strategy, a set of organisational structures must be formed first (Kotler and Keller, 2006). The structure needed for this achievement was to create customer care teams in each industrial section to provide customers with sales services, installation, and support specific to the requirements of that industry while acting as profit centres. These customer care teams were expected to be responsible for being expert on that part of industry, providing specific consultancy to customers focusing on best practices, acting as contact points between customers and the organisation, developing personnel for other units. From a theoretical perspective, this finding suggests that identifying key competencies of a strategic job family during implementation of a strategy may be completed if some other key competencies from other future-oriented strategic insights are added. As the result, the modified theoretical framework was developed to include the new source of competencies from the new strategic insight without any implementation plan. Table 5

Identified themes related to key competencies regarding a new strategic insight Unit of competence – a new strategic insight

4.1

Competency cluster-accountability

4.2

Competency cluster-problem solving of fundamental issues

4.1.1

4.3

4.4

4.2.1

Identifies the source of customer’s problem

4.2.2

Determines the solution method for customer’s problem

4.2.3

Prevent the reoccurrence of the problem besides solving it

4.2.4

Provides the customer with a complete checkup and support services

Competency cluster-expert knowledge in information technology 4.3.1

Understands the application of IT in the customer organisations

4.3.2

Investigates and determine the extent of IT dominance in the customer organisation

4.3.3

Identifies the necessity of applying IT in the customers’ organisation

Competency cluster-organisational awareness 4.4.1

4.5

4.6

Shows accountability and pursues the customer’s issue until it is solved

Knows sufficiently the customer organisation including the culture, business objectives, and business principles

4.4.2

Knows the market and competitors

4.4.3

Knows thoroughly the software industry in the world

4.4.4

Gets known other departments and communicate with them to solve a problem

Competency cluster-exertion to change 4.5.1

Accepts the required organisational changes

4.5.2

is able to make positive changes in the organisation and her/his work scope

Competency cluster-business understanding 4.6.1

Has business understanding and try to maximise the organisation’ revenue

4.6.2

Knows budgeting and estimate the revenue and cost

This may be considered as an evidence that supports the idea of second-loop learning during the control mechanism of the BSC model. According to Kaplan and Norton

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(2000b), two learning loops may be used during the implementation of the BSC model. First, reviewing performance may help managers revise their objectives, measures, targets, and initiatives within their model. Second, this review may help them assess their assumptions about the current strategy. Considering the current evidence, it can be argued that while using the BSC model as a rational and planned approach, an emergent strategy may also be identified (Mintzberg et al., 1998) that requires further competencies for strategic job families. This evidence suggests that the BSC model may require further development in terms of the way new emergent strategies are incorporated into the previous implementation model. This seems to be a critical point, especially because of the time consuming nature of the deployment of the BSC model for a strategy. Therefore, additional new competencies were identified by exploring the managers’ general views on the new strategy. Nine clusters of key competencies required to achieve the above organisational strategy were identified. Although effective communication, listening, perception, and providing proper response, problem solving, and organisational awareness were similarly identified for the previous strategy described earlier, some new specific competencies were identified for this new strategic insight: accountability, problem solving of fundamental issues, expert knowledge in information technology, organisational awareness, exertion to change, and business understanding (see Table 5). It seems that the underlying ideas of top managers about this kind of competencies were that they viewed support personnel as expert solution providers working in their business units. In addition, it was supposed that support staff must be grouped and allocated for their specific industry-based customers, and they must be selected as the internal representative of customers within the company. These were the main justifications for identifying new competencies in relation to the strategic insight.

6

Summary and conclusion

In this paper, a model of competency identification was proposed using the BSC framework. This framework can link the process of competency identification to the process of strategy implementation. Therefore, this framework can be considered a way that aligns HRM practices with strategies implementation in a company. This framework suggests that key competencies can be identified by analysing strategic job families for supporting key business processes, and organisational and information capital required for the implementation of a strategy. Although the research finding identified that the above approach was helpful, it was identified that besides competencies required for the implementations of a strategy, there may be some other strategic insights without any specific implementation plan while implementing a strategy. These insights may be helpful to add some other competencies to the previous model. Hence, a modification was necessary in the proposed framework to comprise the fifth source of competency identification: ‘new strategic insights’. As the result of this study, a competency model was also identified for software support services.

6.1 Main theoretical contributions The most important contribution of this article is to provide evidence that the BSC model can be used for identifying key competencies required for HRM practices in relation to

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business strategies in a systematic way. That is, for each competency identified, one can trace the way that the competency impacts other components of the model (e.g., processes) that will eventually create values for customers within the context of planned strategies. The importance of identifying systematic approaches for future-oriented competency identification has been emphasised in the competency identification literature (Langdon and Marrelli, 2002; Rothwell and Lindholm, 1999; Stevens, 2012). In addition, the framework suggested here can be helpful to differentiate competency identification from job analysis technique (Stevens, 2012) where strategies are taken into account in systematic ways. Although the validity of this framework can be supported by the validity of the BSC proposed by Kaplan and Norton, but future research can compare the results of competency identification proposed by this framework with the results of other models of competency identification. In addition, competencies identified by this framework can be studied in predictive validity studies to assess to what extent these competencies can eventually contribute in achieving strategic objectives. Figure 4

The final competency model for support personnel of the company

In addition to the main theoretical contribution described above, evidence was found that the implementation of the BSC framework for competency identification (described in Figure 1) requires further development in terms of considering new strategic insights that suggest other new competencies. This finding supports the idea that the BSC model

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cannot be used in a linear way without considering new strategies that may emerge during the implementation of a previously accepted strategy (Yadav, 2012). Implementation of this framework also supports the idea of strategic partnership of HR managers (Armstrong, 2006). When a company is involved in the implementation of its strategies using some strategy maps, itsHR manager can define project of competency identification and the development of HRM practices based on competency models for supporting strategy maps. Besides providing a framework for competency identification, this study suggests a competency model for customer support personnel in a software company comprising competency clusters, units of competency, and elements of competency illustrated in Figure 4. This model contains all the competencies described in the previous sections. To the best of authors’ knowledge, no study was identified for the development of a competency model for software support staff using a systematic and future-oriented approach.

6.2 Practical suggestions Based on the framework proposed and supported in this study, a practical guideline can be proposed to practitioners as follows: 1

Identify strategic job families and specific key roles that impact key business processes.

2

Identify and assess activities of each group of processes that are influenced by strategies and are essential for value proposition.

3

Identify competencies of strategic job families necessary for supporting activities of key processes.

4

Identify competencies required for the development of organisational capital such as desirable organisational culture, leadership behaviours, and structure.

5

Identify competencies essential for the development of information systems and IT infrastructure that support key business processes.

6

Identify key competencies crucial for achieving new strategic insights with no implementation plan.

7

Integrate competencies identified in the above stages.

8

Categorise competencies and develop headings and behavioural elements of competencies.

6.3 Limitations In the competency model proposed in this paper, some limitations are recognised that must be addressed in future research: 1

The support personnel competency model has been developed in only one organisation. The model must be further developed in other software companies.

2.

Because the company’s considerations and limitations for contacting its customers, the model was developed with regard to a limited group of customers; while, customers in variety of industries may expect different types of values, which require

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S.B. Alavi et al. some other types of competencies. To extend this research, the new sample should include wide range of customers according to the size of companies and industries.

3

Validation of the competency model was limited to discussion with company’s top managers and their consensus on it; whereas, the validation stage should be conducted in future research more comprehensively using other validation methodologies.

4

The proposed model includes clusters, units, and elements of competencies, but human resource managers need this competency model along with levels and standards of competencies for further implications in other HRM functions.

5

As noted earlier, some of the behavioural elements of the competency model are similar to the components of emotional intelligence. It is suggested to conduct a study on the impacts of emotional intelligence in the contexts of software support processes.

6

Some elements of competency model are related to the concept of trust (Mayer et al., 1995) according to the literature. Competencies required for trust building and their impacts on the success of a support staff needs further empirical investigations.

7

As mentioned earlier, some elements of the competency model are similar to the customers’ perceived service quality. Further research is required to identify key competencies for increasing service quality from the perspective of the SERVQUAL framework.

8

The modified theoretical framework suggests that key competencies regarding business processes should be identified in four major sub processes based on the BSC model. This research has only determined key competencies related to ‘operating processes’. Key competencies associated with other major sub processes must be identified in future research.

9

HRM researchers must identify new strategic performance management frameworks which are more complete than the BSC model, and employ these frameworks in the context of competency identification in order to develop rigorous methodologies for this important practice.

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Notes 1

2

For each competency identified as a code, some quotations were also selected to describe the code in qualitative terms. However, given the page limitation of this article, only few sample quotations have been reported. Kee and Knox (1970) as cited by Mayer et al. (1995).